Benny v. Rhodes

• Decision Date: 31 March 1853
• Parties: BENNY et al., Respondents, v. RHODES, Appellant.
• Court: Missouri Supreme Court

18 Mo. 147

BENNY et al., Respondents,

v.RHODES, Appellant.

Supreme Court of Missouri.

March Term, 1853.

1. A. consigned goods to B., a factor for sale on commission. B. delivered the goods to C. in payment of his own antecedent debt. Held, A.'s title was not divested.

2. The circumstance that a factor has a lien on goods consigned to him, for advances, will not authorize him to deliver the goods in payment of his own debt, or to sell them in an unusual and irregular manner.

3. In an action by a principal to recover goods tortiously delivered by his factor to the defendant, it was held that a payment which had been made by the factor to his principal on a running account of consignments, there having been no appropriation of the payment by the parties to any particular items of the account, would not be applied in satisfaction of the charge for the goods sued for.

Appeal from St. Louis Court of Common Pleas.

Todd & Krum, for appellant.

I. Rhodes was at least entitled to the benefit of what the plaintiffs owed Love & Osborne, for advances and commissions. A factor has a right to appropriate the property of his principal to the extent of his lien, and this demand was a lien. (15 Mo. 184.)

II. The defendant is entitled to the benefit of the principle that, where there are open running accounts between merchants, the payments made by the debtor shall be applied in satisfaction of the items of indebtedness against him, in the order of their time. (1 Merivale, 572; 22 Me., 138; 4 Mason, 333; 5 Mason, 82; 3 Sumner, 98; 11 Leigh, 512.)

III. The plaintiffs, by their settlement with Love & Osborne, ratified the sale to Rhodes, and are thereby precluded from claiming the goods.

T. T. Gantt, for respondents.

I. The pretended sale to Rhodes having been shown to have been a mere contrivance, by means of which Rhodes sought to appropriate the property of the respondents to the satisfaction of an indebtedness from Love & Osborne to him, no title passed to Rhodes thereby.

II. There can be no deduction from plaintiff's demand against Rhodes, on account of any advances made by Love & Osborne, for the reason that the transaction was a fraud upon the plaintiffs, and a breach of trust, to which Rhodes was a party, and he can take no advantage from it.

III. The principle of application of payments cannot be applied to this case. (7 East. 5.) On the whole case, the following authorities are cited: Warner v. Martin, 11 Howard, 209; Holton v. Smith, 7 N. H. 446; McCombie v. Davis, 7 East, 5; Daubigny v. Duval, 5 T. R. 604; Newsom v. Thornton, 6 East. 17; 4 Barn. & Ad. 443; Queiroz v. Trueman, 3 B. & C. 342.

GAMBLE, Judge, delivered the opinion of the court.

This is a civil action to recover the value of specific articles, the property of plaintiffs, alleged to have been converted by defendant to his own use. The case was tried by the court without a jury, and the facts were found as contained in the deposition of a witness. The goods for the value of which the suit was brought, were consigned by plaintiffs to Love & Osborne, of St. Louis, for sale; Love & Osborne being commission merchants. The factors being indebted to the defendant in the amount of a note, were urged by him to make payment, and he offered to take payment in the goods of the plaintiffs. The factors informed the defendant that the goods did not belong to them, but were the property of plaintiffs and only in their possession for sale, as commission merchants. The defendant urging the factors to sell them the goods in payment of their note, at last prevailed over their scruples, and the articles were sold to defendant and the note of the factors satisfied and delivered up. At the time of this transaction the factors as consignees of the goods, had paid out money for freight and charges upon the goods. There was a memorandum of sales sent to plaintiffs by the factors, in which the amount of the goods sold to the defendant was included, but no regular account of sales was rendered for several months after the sale. In that account, the sale to defendant was stated. In the meantime the plaintiffs had drawn bills upon the factors which had been accepted, and one of them, for an amount exceeding the value of the articles which the defendant had received, had been paid by the factors. When the amount of sales was rendered, the factors were indebted to the plaintiffs. The plaintiffs demanded the property of the defendant, claiming that, under the circumstances, their title had not been divested.

1. As the title to the property was in the plaintiffs, the question is, whether it has been divested, and if it has, by what act, and when? The transaction in which the defendant obtained the plaintiff's goods, was with an agent, and it was requisite, in order that the principal should be bound, that the authority of the agent, whether express or implied, should be pursued. The agent was entrusted with the goods of the principal for the purpose of sale for the benefit of the principal. In the absence of particular instructions, the agent was authorized to sell according to the usual mode of dealing in the particular trade which he was conducting. In such case, he might sell on credit, if sales on credit were customary in that trade and at that place. If he sells in an unusual manner, not warranted by the custom of the trade, and without express authority, the principal is not bound by his act. An agent for sale cannot barter the goods of his principal, nor can he pledge them. The law that a factor cannot pledge the goods of his principal, was declared in Patterson v. Tash, (2 Strange, 1182, and has been followed by a long train of decisions in England, so that it became necessary to resort to Parliament to change the law, as was done by 4 Geo. 4 c. 83; 6 Geo. 4, c. 94, and 5 and 6. Vict. chap. 39. The same doctrine is maintained in the States of this Union, and in some of them statutes have been passed to alter it in some respects, as in England. In the cases in which courts have been called on to examine the power of the factor to effect the title of the principal, the true nature and design of the transaction has been regarded, and where it appeared that the substance of the...